they are trying to help out certain classes of folks -- i disagree and i have email my opinion to my congressman!!!Why is the govt interfering with adjustable rate mortgages?
Because too many people need government to act as their nanny and help them when the are not responsible to help themselves. I agree with you. I would have loved to get a lower rate and thus better house if I took an adjustable mortgage. But I know my limitations. I took the security of a fixed rate.
That's not what is happening...
The contract MAKERS are agreeing to accept less-than-agreed-to interest payments in exchange for being able to discriminate among those who get the break and those who do not.
If you and I sign a contract that says the you will pay me 12.50% interest annually for 30 years and the government convinces me to charge you 6.75% for the next 5 year instead, who is going to complain? You? I think not. I'm the one who just made the change (in practice, not in the contract), so who is left to argue that the contract has been violated?
On the other hand if Tom-the-9.75%-rate guy sues because it isn't FAIR, I am protected by the government who told me it was okay. FAIR and contract law are not the same thing.
Because the Fed eased rates too much years ago making credit too easy, banks took advantage of customers with their creative packages, stockholders of these companies demanded high stock prices, which helped banks continue these deceptice practices of giving credit to anyone whose heart was beating, all the while analysts were giving these companies 2 thumbs up, while these practices were in addition bypassed by their accountants.
In other words, if someone were handing out cheap money to you, wouldn't you accept this once in a lifetime present?
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